Summary report from the
meeting between PRIMET and ECOMET representatives
Oslo, 3 November 2004

Participants:

From PRIMET:
Söderman Daniel PRIMET Secretary General
Johannessen Inge Storm Weather Center
Otten Harry Meteo Consult
Saarikivi Pirkko Foreca

From ECOMET:
Eliassen Anton ECOMET Chairman
Cuthbert Colin UK Met Office
Frachon Laurence Météo France
Haderlein Klaus Deutscher Wetterdienst/Chairman ECOMET Working Group
Hoenson René Chief Executive, ECOMET
Pankiewicz George UK Met Office
Svendsen Lillian met.no
Wennerberg Gunlög SMHI

As host of the meeting, Anton Eliassen welcomed the participants to Oslo.

The agenda for the meeting was as follows:

  1. Concerns of the Private Meteorological Sector in relation to the National Meteorological and Hydrological Institutes (NMHSs) in Europe.
  2. How to proceed in practice with the discussion between the Private Meteorological Sector and ECOMET.

It was agreed that there would be no detailed minutes from this meeting, only a summary report.

  1. Concerns of the Private Meteorological Sector in relation to the National
    Meteorological and Hydrological Institutes (NMHSs) in Europe

The representatives from PRIMET, headed by Daniel Söderman, presented the concerns of the private sector as regards the practices of the NMHSs. Their statement is annexed to this report.

Each point taken up in the document from PRIMET was discussed and commented upon by the representatives from the ECOMET side. Each NMHSs representative was also given the opportunity to comment as appropriate on their individual practices and plans for the future in relation to the issues in the document from PRIMET.

It was concluded that the issues in the PRIMET document needed further legal studies. It was also noted by the ECOMET participants that some of the issues of concern for PRIMET were of a political nature at a level above the NMHSs.

In order to take the concerns of PRIMET forward, The Chairman of ECOMET, Anton Eliassen, proposed the following way ahead, which was agreed upon:

A proposal will be presented to the ECOMET General Assembly on 9 December 2004 to submit the PRIMET issues of concern as regards ECOMET practices to legal scrutiny, in order to assess compliance or non-compliance with competition law. It will be proposed to the General Assembly to submit the PRIMET document to two separate law firms, one of these to be chosen by PRIMET, the other by ECOMET, in order to guarantee independent legal advice. It will also be proposed that ECOMET covers the costs.

Should the ECOMET General Assembly agree to this proposed procedure, it will be important to ensure that the material submitted for legal scrutiny is clear and comprehensible. PRIMET will therefore refine its document. ECOMET will also submit an explanatory document from its side, as well as the basic ECOMET documents. This will constitute a package of document to be submitted for legal scrutiny.

In any case the issues of concern taken up by PRIMET in its document will be submitted to the forthcoming ECOMET General Assembly for discussion and reaction.

2. How to proceed in practice with the discussions between the Private Meteorological Sector and ECOMET

The Chairman of ECOMET referred to the decision of the ECOMET 18th General Assembly:

As a first step to improve the relationship between the public and the private sector, a forum of representatives of the public and private sector should meet at least annually. The forum should discuss interpretation of ECOMET rules and conditions, as well as proposals for intended changes to the rules and conditions. It will also discuss cases of possible discriminatory behaviour. The first meeting of such a forum should take place as soon as practically possible, before the 19th session of the ECOMET GA.

The intention from the ECOMET side was to see this present meeting in Oslo as a first step to establish such a forum. PRIMET agreed to the need of such a forum as a mechanism for further dialogue. It was furthermore agreed that the UK Met Office representative will draft a proposal for terms of reference for the forum, based on the above decision from the ECOMET General Assembly.

It was also agreed that the new forum will meet in spring 2005. Informal contacts will be taken to agree on date and place of the meeting.

Any other business
Pirkko Saarikivi referred to the ATMET report produced some years ago, summarizing total costs of meteorology in Europe. She will circulate the report, for possible consideration as to whether the report should be updated.

Finally Anton Eliassen thanked all the participants for a most constructive meeting, and hoped they had enjoyed their stay in Oslo.

Annex: PRIMET Statement

Annex

Concerns of the Private Meteorological Sector in Relation to the
National Meteorological and Hydrological Institutes in Europe

Draft PRIMET Statement as of 26.10.2004 for ECOMET-PRIMET meeting 3.11.2004

1. Introduction

Following consultations with the PRIMET Secretary General, Prof. Anton Eliassen, President of the ECOMET General Assembly, invited representatives of the Private Meteorological Sector to a meeting in Oslo on Wednesday 3 November 2004 for discussions with the ECOMET Legal Task Force.

The following agenda items were suggested by Prof. Eliassen for the meeting:

  1. Concerns of the Private Meteorological Sector in relation to the National Meteorological and Hydrological Institutes (NMHIs) in Europe.
  2. How to proceed in practice with the discussions between the Private Meteorological Sector and ECOMET.

At its Annual General Meeting held in Berlin on 1-2 October 2004 PRIMET decided to accept the invitation although some concern was expressed over the fact that ECOMET according to the proposal would be represented by a many as nine persons, and nominated the Secretary General together with representatives of Meteo Consult of the Netherlands and Storm Weather Center of Norway to participate in the meeting on behalf of PRIMET (the correspondence can be found at website www.primet.org).

In subsequent communications the number of ECOMET delegates was reduced from nine to seven, including Prof. Eliassen and the ECOMET Chief Executive, with the national institutes of France, Germany, Norway, Sweden and the United Kingdom to be represented.

This statement will cover item 1 of the agenda, whilst it is expected that the second agenda item will be discussed primarily during the meeting itself.

2. PRIMET Concerns in relation to the National Meteorological and Hydrological Institutes

In addition to the Comfort Letter on ECOMET issued by the European Commission in October 1999, the following paragraphs from Article 81 (ex Article 85) of the Treaty of Rome are of particular significance in the context of this document:

1. The following shall be prohibited as incompatible with the common market; all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention[,] restriction or distortion of competition within the common market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

2.1. Overall concerns

The overall PRIMET concerns in relation to the policies and activities of ECOMET and those of most of the governmental meteorological and hydrological institutes in Europe are:

Overall the above means that five years after the Commission issued its Comfort Letter on ECOMET, the European meteorological market place is today far from a level playing field.

Furthermore market developments have because the problems relating to data access and costs been very disappointing, especially if compared to the corresponding US trend, and there is little competition between the NMHIs, contrary to the impression gained by the Commission in connection with the issuing of the Comfort Letter.

2.2. Specific issues

3. The primary reason for the problems and possible remedies to address it

However, the underlying reason for most of the problems is that the NMHIs on behalf of their countries hold and have continuous access to an enormous set of current and past environmental data. In consequence, if the institutes engage in commercial activities, a level playing field can only be achieved if full compensation for this privileged and continuous access is paid by the commercial division of the institute. Unfortunately the value of such a data services based on ECOMET tariffs is extremely high, reaching tens or possibly even hundreds millions of euros per year.

In reality little or no compensation is paid by the NMHIs, and they are thereby systematically in breach of both competition law and the foundation of the Comfort Letter on ECOMET. As it is desirable that public institutes keep their promises and, in particular, are not in breach of applicable laws, corrective action should be taken as soon as possible, possible remedies being:

(a) leaving commercial activities to the private sector wherever possible, in line with the report "The State as a Commercial Actor" by Statskontoret (the Swedish Agency for Policy Management), and similar reports by the Finnish and Norwegian Competition Authorities
(b) (a) implementation of a total administrative, logical and physical separation between the public and the commercial part of the NMHIs, as already done in The Netherlands, and
(c) (a) implementation of public data servers providing data access and support on the same conditions to all actors, including the commercial entities of the NMHIs, and
(d) making environmental data freely available on a non-discriminatory basis during the transitional period, as a full implementation of the public data servers referred to above would take ten years or more. As a first step all synoptic data (all stations, at least hourly) should be completely freely available - reference is also made here to the attached article "Making environmental data freely available would make Europe more competitive".

3. Future role of ECOMET and PRIMET

In view of the fact that ECOMET as it operates at present can be seen as a cartel, taking into account in particular the dominant role it plays on the intergovernmental scene and in the European market place, as well as the decisions taken by it on prices affecting the whole market such as lowering the price for the total ECMWF data set from 365 000 to 140 000 euro per year, it might be wise to remove the price-related activities and decisions from ECOMET, for instance by means of a European “data ombudsman” as part of a “regulated self-regulation” of the European meteorological market as discussed at the 1st ECOMET/AEDUE (PRIMET) Expert Meeting in Brussels 28 May 2002. This would still leave a meaningful role for ECOMET as an international supervisor/coordinator of public sector activities and services, ideally in close collaboration with PRIMET.

ANNEX

Daniel Soderman:
"Making environmental data freely available would make Europe more competitive"

At their March 2000 meeting in Lisbon, EU heads of state and government agreed to make the European Union ”the most competitive and knowledge-driven economy by 2010”. However, although some progress has been made in boosting innovation and reforming the EU's economies, there is growing concern that the reform process is not going fast enough and that the ambitious targets will not be reached.

A high-level expert group chaired by Wim Kok was established in March 2004 to assess the instruments used to date, and to make recommendations on how to give new impetus to the Lisbon strategy. Furthermore the next president of the European Commission, José Manuel Barroso, has recently confirmed his attachment to the Lisbon agenda.

Although the problem of rigid national administrations and agencies with limited interest in promoting efficient all-European solutions also will have to be addressed, there is one obvious shortcut to enhanced efficiency and substantially increased commercial revenues: in line with the very successful US policy, making environmental data produced with European public funding freely and efficiently available to all interested parties.

In the field of meteorology, an area with an enormous production of space- and surface-based observational data in real-time, two major steps have been taken since 1995 towards an environment which is less rather than more competitive:

  1. the approval by the World Meteorological Organization in 1995 of WMO Resolution 40, which distinguishes between “essential” data and products which are necessary for the provision of services for the protection of life and property and the well-being of nations, and “additional” data and products on which conditions for their re-export for commercial purposes may be placed (comment: virtually any experienced meteorologist would agree that such a distinction is unrealistic because of the chaotic behaviour of the atmosphere);

  2. the establishment of ECOMET, an Economic Interest Grouping of National Meteorological Services, and the associated issuing by the European Commission on 21 October 1999 of a protective “Comfort Letter” on ECOMET (comment: as the Comfort Letters have been phased out as from 1 May 2004, and as ECOMET to many outside observers looks like a cartel, the new European Commission will probably have to address this issue).
The environment created by the above two actions spearheaded by the National Meteorological Services (NMSs) in Europe has substantially reduced the capability of European actors to compete in the global meteorological market place. This can be exemplified by studying the commercial utilisation of products from the European Centre for Medium-Range Weather Forecasts (ECMWF), an intergovernmental agency established in 1975 by 17 European nations, details being as follows:

- in 1971, a detailed cost/benefit analysis compiled as part of the establishment of ECMWF concluded that the cost/benefit ratio of the new Centre would be 1:25 or better;
- before the start of operations in 1979, the ECMWF Council decided that there would be only one communications link, terminated at the National Meteorological Service, between ECMWF and each Member State, i.e. that the distribution of products to other parties within the country would be controlled by the NMS;

- during the 1980's prohibitively high ECOMET charges were gradually implemented;
- during 2003 only € 0.46 million was collected by the NMS's from sales of ECMWF products, as compared to the € 1000 million overall benefit projected by the original cost/benefit study (comment: the enormous discrepancy is partially due to the fact that it was assumed in the study that the forecasts would be made freely available within the Member States, in line with common practice at the time);

Another perspective of the same problem is that according to a detailed study on the use of numerical weather prediction (NWP) data, performed in early 2004 by the Association of Private Meteorological Services (PRIMET):

This extraordinary and for Europe rather embarrassing situation can be primarily explained by that fact that the US data are made available at no cost, and by the US distribution system being non-discriminatory and fully automatic (comment: the licence fee excluding delivery charges for a full set of ECMWF data is € 140 000 per year, having been recently reduced from € 365 000 per year).

In conclusion it is suggested that the European Commission:

  1. takes action towards making all publicly funded environmental data freely available;
  2. promotes the design and implementation of non-discriminatory and fully automatic distribution systems for such data;
  3. initiates a project to monitor how efficiently data held in major European environmental databases are utilised both internally and by external entities.
Finally it should be noted that making environmental data available on the same conditions to all parties removes the possibility of the public agencies holding these data being in breach of national and European competition law if information from the same data sets is used by them for commercial purposes.